Friday, April 08, 2016

How did Bernie Get Here?

This is --somewhat surprisingly-- never reported in the mass media, not even the pro-Bernie outlets, but is nonetheless well-understood by the cognoscenti: The reason Bernie Sanders --a grumpy old socialist who is not even a Democrat-- is the one running against Hillary in this 2016 primary is that no Democrat could do so, NOT that there weren't any qualified Democrats who would have loved to do so. Hillary Clinton has amassed so much power within the Democratic party by dint of her status as First Lady, NY Senator and the dozens of other roles she has played in the party over the last 20 years, that she is now demanding her just dues: nomination for the highest office. She has effectively attained such a tight grip over the party apparatus that no other Democratic-affiliated operative dare challenge her. The mechanics of this is simple: run afoul of her and she will divert DNC campaign funds from you, (or worse yet channel it to your primary opponent) and ensure that you never get to rise the party ranks through choice appointments and so on. Every Democratic politician knows this and so plays ball. They know that this is Hillary's time to run for the the Presidency and whether she is the best candidate or not, they MUST support her on pain of political suicide, because SHE has earned it.

Thus, no Democratic politician has taken up the primary bid in this election cycle. Biden and Warren, both of which could have been very viable challengers demurred in the face of the Clinton behemoth. Sanders, however, as a non-Democratic officeholder was not bound by this vow. Furthermore, he has never received funds from her DNC fundraising efforts, and as an independent has nothing to lose by not joining ranks with the Democrats on this or any other issue.

All of the aforementioned is well understood. But what just occurred to me today is something novel. If Hillary REALLY wanted to nip Sanders in the bud, she may have been able to do so. She may have dispatched some honorable progressive Democrat, such Elizabeth Warren, whom Sanders truly has enormous respect for, to prevail upon him NOT to rain on Hillary coronation parade.

But Hillary's didn't do this. The campaign probably reasoned that she needs some token opposition or else it the system may seem rigged or the media may not give the process enough desirable attention. What Hillary's campaign CLEARLY didn't reckon is that Sanders would be at this level of popularity --and rising-- both in popular esteem and delegate count. In the media, Clinton surrogates will of course continue to say that her nomination is virtually inevitable, that is "almost certain" to be the nominee, but this is all posturing in an attempt to manipulate voters, since no American wants to vote for a loser. Winning six out of the seven last primaries and being neck in neck in NY polls is alarming news for Hillary.

And so to restate: Hillary ALLOWED Sanders to run out of utter disdain for him. As a non-Democrat, Socialism-espousing, septuagenarian, she had no problem with him running at first. Now that he's thriving beyond anyone's (including Sanders' own) imagination, she's in a panic.

Anecdotal indicators on the ground seem to be pointing at a Sanders win come the NY Dem primary election day, April 19 2016. I am assessing Sander at even money beat Hillary in NY. The official polls are of course always behind the latest trend of Sanders' surge, so they're not much of help here, but they peg him at 10 points behind Hillary. Yet, I am amazed that the Predictit market is giving Hillary an 80% chance of winning NY.

Saturday, April 02, 2016

My Rebuttal to Carles Blow's ridicule of the Bernie or Bust movement

See the article at

If Sanders wins the nomination, liberals should rally round him. Conversely, if Clinton does, they should rally round her.
Liberals surely will rally around him if Sanders wins. But why should they rally around Clinton if she wins? She is demonstrably NOT a liberal on economic issues. So, no, they should not and many of them will not rally around her if she wins (as indeed the poll you cite indicates).

When Al Gore ran against George W. Bush in 2000, some claimed that a vote for Gore was almost the same as a vote for Bush and encouraged people to cast protest votes for Ralph Nader. Sarandon supported Nader during that election. Bush became president, and what did we get? Two incredibly young, incredibly conservative justices, John G. Roberts Jr. and Samuel A. Alito Jr., who will be on the court for decades, and two wars — in Afghanistan and Iraq — that, together, lasted over a decade.
In addition to setting the tone and direction of the country, the president has some constitutional duties that are profound and consequential. They include being commander in chief, making treaties and appointing judges, including, most importantly, justices to the Supreme Court. Bush demonstrated the consequences of that. 

Okay, this seems like a good point on its face: If Susan Sarandon hadn't made the "mistake" of supporting Ralph Nader in 2000, maybe we would have had a Gore presidency and averted the wars in Iraq and Afghanistan and the conservative Supreme Court appointees.

What's flawed in this argument, however, is that it doesn't proceed to its logical conclusion: that a Gore administration (which, evidently, Sarandon and others considered closely-enough-bad to a Bush presidency) would NOT have invaded Iraq, and would have nominated justices who were more "progressive".

As it turns out upon close analysis, this isn't at all necessarily so. Without the famous, supposedly liberal, NYT-published Judith Miller "endorsement" of the Iraq War (as it were), it's unlikely that Bush would ever have gotten a sizable number of Congressional Democrats to support the war resolution and thus have gone to war. If the Democratic-affiliated NYT can so easily push for this sort of aggressive and expansionist foreign policy, then I'm not at all convinced that a Gore administration would have not asked Congress to virtually declare war.

What Blow and many establishment pundits don't get, is that true policy differences are no longer divided along partisan fault lines, but along establishment/revolution battle lines. Establishment Democrats are more liberal only on social policies. When it comes to things that really matter to working-class Americans --as in the kind of policies that will affect their paychecks-- there was no demonstrable difference between Gore and Bush, just as there isn't any in the current election cycle between a hypothetical matchup between Jeb Bush (he has already dropped out) and Hillary Clinton, both members of the aristocratic power establishment.

Ditto to Blow's point about the Prez's power to nominate liberal justices: Sanders supporters and true progressives don't care about Elena Kagan and Sanya Sotomayor -type liberals. They are liberal about social policy alright (gay marriage, abortion, etc...) but these are distractors. The real challenge is overturning Citizens united, reforming the tax code, ending the corporate loopholes, taxing investments, ending foreign entanglement. Clinton stands for none of the above. Trump does stand for some of them. If anything, Trump is likely to nominate justices who are more favorable to the working class in those respects. What's more, it could be argued that his nominations could sail through Congress breezily since the Obama-obstructionist right-wing will now supposedly be on the same party Prez's side.
 The real estate developer is now talking carelessly about promoting nuclear proliferation and torture (then there’s Ted Cruz’s talk of carpet bombing and glowing sand).
He's completely taking Trump out of context here. Chris Mathews asked Trump whether he would take the nuclear option off the table. He responded with the common-sensical: why do we have nukes if they are not on the table? Mathews then continued to press Trump on whether he would use them on China, Europe etc... I was, frankly, disgusted by his line of questioning, which was obviously meant to fearmonger the audience. Why doesn't Mathews ask this question ANY OTHER candidate? Would Clinton or Sanders or Cruz answer any differently? If so, they're either fools or lying. OF COURSE it's on the table. It doesn't mean that it's even remotely LIKELY that nukes will be used in any given presidential tenure. But it's possible. (Recall that at the height of the Cold War, c. 1960, most people believed nuclear war was imminent. They would have been astonished and appalled by a presidential candidate running on a platform of taking nukes off the table).

Regarding torture, I know that many libs are against torture. Personally, I agree with Trump and other Republicans that there was and is nothing wrong with waterboarding and other torturous (a.k.a. "enhanced interrogation") techniques to extract information from suspects, in the interest of investigating an imminent national threat. I am surprised at how forgetful people are of 9/11 and the consequent necessity to gather intelligence by all reasonable means on possible future attacks. Is torture of a suspected terrorist enemy-sympathizer too high a price to pay for our national security? I don't think so!

I would in fact go a step further and support such torture even against American nationals (who are public enemies and have information that could avert a public disaster). And, no, I don't think this is prohibited by the constitutional ban on cruel and unusual punishment, since this it is investigative in nature, not punitive.

Furthermore, Toobin laid out the diversity of the Obama transformation, writing:
“Sheldon Goldman, a professor at the University of Massachusetts at Amherst and a scholar of judicial appointments, said, ‘The majority of Obama’s appointments are women and nonwhite males.’ Forty-two percent of his judgeships have gone to women. Twenty-two percent of George W. Bush’s judges and 29 percent of Bill Clinton’s were women. Thirty-six percent of President Obama’s judges have been minorities, compared with 18 percent for Bush and 24 percent for Clinton.”
And beyond war and courts, there is the issue of inclusion.
Take Obama’s legacy on gay rights. He signed the bill repealing “don’t ask, don’t tell.” And in 2012, Obama became the first sitting president to support same-sex marriage. Last year, Obama became the first president to say “lesbian,” “transgender” and “bisexual” in a State of the Union speech.
Of more substance, according to the Gay & Lesbian Victory Institute:
“To date, the Obama-Biden Administration has appointed more than 250 openly LGBT professionals to full-time and advisory positions in the executive branch; more than all known LGBT appointments of other presidential administrations combined.”
There is no reason to believe that this level of acceptance would continue under the real estate developer’s administration. In fact, the Huffington Post Queer Voices editor at large Michelangelo Signorile wrote an article in February titled, “No, LGBT People Aren’t Exempt from Donald Trump’s Blatant Bigotry,” responding to a trending idea that the Republican front-runner wasn’t as bad for queer people as other Republican candidates:
“It’s absolutely false — he’s as extreme as Ted Cruz and Marco Rubio, and will do nothing for LGBT rights — and it’s time to disabuse the media and everyone else of this notion once and for all.”
To summarize: Blow argues that the current Obama administration, as well as a Clinton or Sanders administration, would be active in appointing more federal operatives who are:
  • women
  • black
  • Latino
  • LGBT
But I find this argument (a little but) not much worse than the argument to vote for Hillary because she's a woman. Whenever we address the question of how inclusive our civil service sector should be, the first thing we ought to ask ourselves is: are we talking about appointing a minority person because they belong to a disadvantaged group or despite that. There is a big difference. The former is affirmative action and is contentious policy; the latter is just, fair and open-minded policy. There is, in my view, no moral imperative to appoint minorities because they are minorities --to give them a leg up in the hiring/appointment process even if they do not measure up to the talent and qualifications exhibited by other, majority-identified candidates.

If Obama's reasoning in appointing two women, one of them Latino, to the highest judicial office is that we ought to make a symbolic overture to show that such underrepresented groups are fully equal citizens and nurtured and respected by our society, even if they are not the most highly qualified candidates --a compelling, though controversial argument to make--, let us yet at least agree that it is not a national priority above the problem of money in politics, and gross income and wealth inequality. If we are forced to choose between a candidate who does not support affirmative action but does support campaign finance/wealth distribution reform, on the one hand; and a candidate who does support affirmative action with respect to public servant appointments but does not support the above reforms -- I, and other BernieOrBusters affirm that the former (Trump) trumps the latter (Clinton) on this.

Then there are all the other promises — threats? — the real estate developer has made. He has said he would deport all undocumented immigrants, build a border wall between the United States and Mexico, end birthright citizenship, dismantle Obamacare and replace it with something “terrific” (whatever that means), defund Planned Parenthood and temporarily ban most foreign Muslims from coming to this country, among other things.
I find none of the above proposals terribly offensive. Hey, I am generally pragmatic when it comes to public policy. I want to see politicians who represent my interests. Frankly, as Rick from Casablanca would say, I stick my neck out for no one. EVEN IF (and this is a big if) it is morally wrong to do all or some of the above things, it is very far-fetched to argue that such policies affect me or other working class Americans negatively, or will do so in the future. Conversely, the positive consequences are fairly concrete: higher wages for Americans if illegals immigrants are deported, less public expense for children of illegal immigrants who come here for the express purpose of achieving birthright citizenship for their children and thus anchoring the whole family here, and so on.

Again, I grant that these are arguable points. But what I'm saying is that they are abstract moral questions with no absolutely definitive answer. What a working-class person does know for sure and feel it in their bones every day is that health care for all would be a huge relief, that higher education for all would be an enormous benefit, and that better infrastructure and better-paying jobs would make life for working-class citizens so much better. Those are the things Sanders fights for, not a pseudo-liberalist platform which centers on social issues and is meant as a red herring to divert our attention from the stuff that is consequential, namely the economic issues.

It is unfortunate for Sanders, who seems infinitely sober and sensible, that some of his surrogates and supporters present themselves as absolutist and doctrinaire. As Sanders himself has said, “on her worst day, Hillary Clinton will be an infinitely better candidate and president than the Republican candidate on his best day.”
Yeah, I know, Sanders did say that. I am not sure that he fully meant it, though. What we do know is that Sanders could have attacked Clinton and contrasted his philosophy with hers much more emphatically, but he strategically chooses not to. We also know that Sanders isn't a real Democrat -- or should I say that he isn't a contemporary, corporatist, centrist, "neoliberal", Clintonian Democrat (though he would fit right in with the FDR-type Democrat). He is running on the Democratic ticket because that's by far his best chance to win the presidency in a two-party political system, such as we currently have. Consequently it is only natural that Sanders would show loyalty to the party if he is to run under its mantle. This doesn't mean that his supporters, who are by and large non-partisan, ought to take Sanders' words here that "Clinton would be an infinitely better candidate" at face value.

But even if Sanders really means what he says, we citizen-voters do not heed him nor serve him. He serves the revolution; he serves the cause; he is elected to address our outrage at the absurdity of us getting so little of the rising national wealth, whereas the top 1 percent is getting so much. This is our revolution, not Sanders'. We are electing him into office. He doesn't get to tell us whom to vote for, though I would certainly respect his advice and take it earnestly into consideration at the ballot.

Saturday, March 19, 2016

Why I prefer Trump over Hillary

This 2016 presidential election cycle is the most bizarre I have ever witnessed. The party system seems to be on the verge of collapsing.

The front-runner in the Republican party is Donald Trump, a non-politician and party outsider; he was not aligned with Republicanism any more than with Democratism in the height of his business career, during which he donated to both parties and his sole interest was favorable legislation for his enterprises. He is despised by Republican party establishment politicians who view him as a loose cannon who does not represent the party platform interests of war/defense industry, foreign entanglement, deregulation, low taxes on the rich, and so on. (Interestingly, this party elite doesn't care about his relatively pro-abortion stance, which issue it only espouses due to its evangelical constituency, one that doesn't constitute the core of the Republican party.)

On the Democratic side, Bernie Sanders is growing stronger by the day and poses an enormous, underrated, threat to topple its establishment frontrunner Hillary Clinton. Sanders is not even a Democrat and was not originally seen as a viable contender by the party elite.

Thus on both sides we have strong party candidates who are aiming for non-establishment interests and the establishment in either party is scrambling to figure out what to do to regain control of the situation.

Overall I consider myself a centrist/independent ideologically. In some respects I agree with Democratic principles, e.g. sensible business regulation, high taxes on the rich and basic provisions for the masses. In some respects I lean more Republican, e.g. moral absolutism, authoritarianism (as in submission to "authority" without the pejorative connotation of the word), personal responsibility, elimination of affirmative action and a conservative judiciary. However, the current Republican party, hijacked by the 2010 Tea Party radicals, sworn to never compromise on its principles, and oppose the Obama Administration no matter what it proposes, is hardly the Republican party of Reagan. So I would normally vote Democratic (which governs from the center for the most part) in elections.

But like I said, this election cycle is different.

Whereas I am a strong Bernie Sanders supporter (for which reasons I won't discuss right now), it isn't because I bear any loyalty to him personally, let alone the party under which auspices he is running. I do not agree with everything he says, especially on moral issues (I am believe in greater moral absolutism and sterner government enforcement of the law), but I don't see elections as ever being black or white propositions. One most vote for the best of the bunch, not for the perfect one. Fortunately, I consider Bernie Sanders a very good representative for most of my interests as a member of the working class, struggling under many years of widening income and wealth inequality.

And I emphatically disagree with his statement that any Democrat would be better in the White House than any Republican, and that the policy differences between him and Hillary are negligible compared to any policy platform proposed by the other side. I'm not sure if he really means it when he says it; perhaps it's something he is expected to say, now that he is running for the Democratic ticket.

The reality of the situation is that Trump's actual policies, not his obnoxious persona or the things he says, are quite tolerable. Conversely, taking a look at Hillary's policies and her modus operandi as a politician I find her grossly repulsive.

So here's a breakdown of some Trump positions, takes from his website and how much I agree with them.

On Healthcare:
Completely repeal Obamacare. Our elected representatives must eliminate the individual mandate. No person should be required to buy insurance unless he or she wants to.
 Okay, I applaud this libertarian lean, but let's see how he solves the problem...
Modify existing law that inhibits the sale of health insurance across state lines. As long as the plan purchased complies with state requirements, any vendor ought to be able to offer insurance in any state. By allowing full competition in this market, insurance costs will go down and consumer satisfaction will go up.
He's scapegoating here. Lack if Interstate competition is NOT the culprit for high premiums. There is plenty of room for competition within a state. Eliminating state lines on the provider side poses a problem if we agree that states should still be allowed to enact their own healthcare, insurance, and business laws
Allow individuals to fully deduct health insurance premium payments from their tax returns under the current tax system. Businesses are allowed to take these deductions so why wouldn’t Congress allow individuals the same exemptions? 
I fully agree with this position, insofar as we take for granted that business ought  to be able to deduct their healthcare expenditures from their income. Even better would be, however, to scrap the healthcare deudction altogether.

As we allow the free market to provide insurance coverage opportunities to companies and individuals, we must also make sure that no one slips through the cracks simply because they cannot afford insurance. We must review basic options for Medicaid and work with states to ensure that those who want healthcare coverage can have it.

Sounds like an expansion of Medicaid to me. Isn't this EXACTLY what Obamacare did, and isn't this the one component of Obamacare that conservatives got the Supreme Court to strike down, and Republican governors had successfully repelled? Oh, right, it is. So when it comes to substance, Trump's position here isn't all that anti-Obamacare, or "conservative".
Allow individuals to use Health Savings Accounts (HSAs). Contributions into HSAs should be tax-free and should be allowed to accumulate. These accounts would become part of the estate of the individual and could be passed on to heirs without fear of any death penalty. These plans should be particularly attractive to young people who are healthy and can afford high-deductible insurance plans. These funds can be used by any member of a family without penalty. The flexibility and security provided by HSAs will be of great benefit to all who participate.
I fully agree with HSA's as a major improvement to the pre-Obamacare state of affairs. HSA's are essentially a logical extension of the "insurance premiums should be tax deductible" doctrine. As I said earlier, I would have preferred that this be abolished altogether, but a selective application of it, as was the case prior to the ACA is patently unfair to those who do not get employer coverage. HSA's are also a very effective motive for acting responsibly in planning for a rainy day, all the while NOT involving the insurance company middleman, which is monumentally grievous distorter of the natural healthcare market. Prior to the ACA many young people went uninsured if it wasn't employer-provided. If HSA's were available to them, they may well have used them. As Trump insinuates, HSA's may not have enough money in the account to cover catastrophic care, but catastrophic insurance policies (as exemplified by high-deductible policies) are much more affordable.
Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals. Individuals should be able to shop to find the best prices for procedures, exams or any other medical-related procedure.
He couldn't have said it better! And I agree that government has a legitimate role to play here for the purpose of ensuring a fair marketplace. (This would thus meet the Libertarian principle of government action being justified to prevent fraud, as stipulated by Charles Murray.) Transparency in pricing also encourages HSA's as opposed to insurance policies, since consumers can then shop around and pay perhaps less than what an insurance company would pay for care on his behalf.
Block-grant Medicaid to the states. Nearly every state already offers benefits beyond what is required in the current Medicaid structure. The state governments know their people best and can manage the administration of Medicaid far better without federal overhead. States will have the incentives to seek out and eliminate fraud, waste and abuse to preserve our precious resources.
I agree with this. If a Medicaid program for the poor is to be implemented, the federal government is best off leaving the states to decide what constitutes poverty, and what and how benefits ought to be distributed. This is due to regional differences in income.
Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products. Congress will need the courage to step away from the special interests and do what is right for America. Though the pharmaceutical industry is in the private sector, drug companies provide a public service. Allowing consumers access to imported, safe and dependable drugs from overseas will bring more options to consumers.
I love this item the most! Trump takes a swipe at the omnipotent pharmaceutical industry here, which is so so overdue. Sanders comes at it from a completely different angle of course. But I do agree that if the free market is going to provide healthcare, the least the government can do is prevent powerful conglomerates from forcing the public to pay obscene amounts for basic necessity drugs. In this respect, I disagree strongly with Murray's libertarianism, in that the government does have a very legit role in regulating markets that provide basic necessities to the public.

Providing healthcare to illegal immigrants costs us some $11 billion annually. If we were to simply enforce the current immigration laws and restrict the unbridled granting of visas to this country, we could relieve healthcare cost pressures on state and local governments.
I agree that the illegal immigration problem is especially exacerbated with respect to health care. There are anecdotes of illegal immigrant expectant mothers coming here to give birth, both to have an "anchor baby" citizen by which they will remain moored to the U.S. and protected from deportation, and to get American-style high-quality neonatal care for free.

Although Trump doesn't mention it here, I also agree with him that the legal citizenship status of such babies is dubious. We need to to take a second look at the traditional assumption of birthright citizenship. The writers of the 14th amendment almost certainly didn't intend to grant citizenship rights to those "born or naturalized in the U.S." in this way.

Whether this $11 billion is accurate is immaterial. We shouldn't have to spend a penny on illegal immigrants, especially if they are deliberately entering our country for the purpose of receiving free benefits, knowing that we will be compassionate.

Finally, we need to reform our mental health programs and institutions in this country. Families, without the ability to get the information needed to help those who are ailing, are too often not given the tools to help their loved ones. There are promising reforms being developed in Congress that should receive bi-partisan support.
Not sure to what type of "information needed to help those who are ailing" he is alluding here.

Regarding Trump's Tax plan:

Too few Americans are working, too many jobs have been shipped overseas, and too many middle class families cannot make ends meet. This tax plan directly meets these challenges with four simple goals:
  1. Tax relief for middle class Americans: In order to achieve the American dream, let people keep more money in their pockets and increase after-tax wages.
This vision is highly dubious. With a staggering national debt, a crumbling public infrastructure and a bloated government, no responsible economist recommends a tax cut to ANYONE, including the middle-class. But certainly, if he considers me the middle-class, I could use a tax cut.
  1. Simplify the tax code to reduce the headaches Americans face in preparing their taxes and let everyone keep more of their money.
Right on!
  1. Grow the American economy by discouraging corporate inversions, adding a huge number of new jobs, and making America globally competitive again.
  1. Doesn’t add to our debt and deficit, which are already too large.
Okay, then, how will you give a tax break to the middle class -- if you stipulate the tax break cannot result in an increasing deficit?
  1. If you are single and earn less than $25,000, or married and jointly earn less than $50,000, you will not owe any income tax. That removes nearly 75 million households – over 50% – from the income tax rolls. They get a new one page form to send the IRS saying, “I win,” those who would otherwise owe income taxes will save an average of nearly $1,000 each.
Wow, this us huge! This means that I will owe nothing in income taxes. This is so so welcome, but more importantly, the right thing to do! People like me who work extremely hard but make little income should not be taxed if the tax can be made up by increasing the burden on those who got lucky and are raking it in hand over fist.
  1. All other Americans will get a simpler tax code with four brackets – 0%, 10%, 20% and 25% – instead of the current seven. This new tax code eliminates the marriage penalty and the Alternative Minimum Tax (AMT) while providing the lowest tax rate since before World War II.
Sounds good.
  1. No business of any size, from a Fortune 500 to a mom and pop shop to a freelancer living job to job, will pay more than 15% of their business income in taxes. This lower rate makes corporate inversions unnecessary by making America’s tax rate one of the best in the world.
This solves the problem of global competitiveness for business headquarters.
Oh no, Mr. Trump. I am a very strong proponent of the estate tax. It serves to level the playing field and counteract the Matthew Rule (the rich get richer and the poor get poorer). Most importantly, it minimizes the effect of luck on material prosperity and lets grit, talent, and dedication shine.
  1. No family will have to pay the death tax. You earned and saved that money for your family, not the government. You paid taxes on it when you earned it.
But then again, what can one expect from such an egotistical person, as Trump? He knows only of his own success, and that certainly would not have been possible without his hefty inheritance.
  1. Reducing or eliminating most deductions and loopholes available to the very rich.
  2. A one-time deemed repatriation of corporate cash held overseas at a significantly discounted 10% tax rate, followed by an end to the deferral of taxes on corporate income earned abroad.

  1. Reducing or eliminating corporate loopholes that cater to special interests, as well as deductions made unnecessary or redundant by the new lower tax rate on corporations and business income. We will also phase in a reasonable cap on the deductibility of business interest expenses.
Income Tax RateLong Term Cap Gains/ Dividends RateSingle FilersMarried FilersHeads of Household
0%0%$0 to $25,000$0 to $50,000$0 to $37,500
10%0%$25,001 to $50,000$50,001 to $100,000$37,501 to $75,000
20%15%$50,001 to $150,000$100,001 to $300,000$75,001 to $225,000
25%20%$150,001 and up$300,001 and up$225,001 and up
Love it, but I need to see the numbers here. Do the rich pay less than a 25% "effective" marginal (non-investment) income tax rate presently?
10% is letting them off the hook. I don't see why it should be so little.

For those Americans who will still pay the income tax, the tax rates will go from the current seven brackets to four simpler, fairer brackets that eliminate the marriage penalty and the AMT while providing the lowest tax rate since before World War II:
With this huge reduction in rates, many of the current exemptions and deductions will become unnecessary or redundant. Those within the 10% bracket will keep all or most of their current deductions. Those within the 20% bracket will keep more than half of their current deductions. Those within the 25% bracket will keep fewer deductions. Charitable giving and mortgage interest deductions will remain unchanged for all taxpayers.
Simplifying the tax code and cutting every American’s taxes will boost consumer spending, encourage savings and investment, and maximize economic growth. 
I hope that Trump is proposing these tax be marginal. It would be absurd to say that if a couple earns $49,000 it owes nothing in taxes, but if its income goes up to $50,000 its tax liability is now $5,000, thus netting less for greater productivity. If, on the other hand, these brackets are not marginal, it would explain why those in the lower brackets will have a wider range of allowed deductions.

However, if the goal of tax reform is to eliminate its complexity, then why not eliminate ALL deductions, period.

While I'm at it, I'm of the opinion that both charity and mortgage interest should be fully taxable. Those deductions have a distorting effect on the natural incentives of the market (e.g. buying or renting a home) and so it's bad policy.

Too many companies – from great American brands to innovative startups – are leaving America, either directly or through corporate inversions. The Democrats want to outlaw inversions, but that will never work. Companies leaving is not the disease, it is the symptom. Politicians in Washington have let America fall from the best corporate tax rate in the industrialized world in the 1980’s (thanks to Ronald Reagan) to the worst rate in the industrialized world. That is unacceptable. Under the Trump plan, America will compete with the world and win by cutting the corporate tax rate to 15%, taking our rate from one of the worst to one of the best.
This lower tax rate cannot be for big business alone; it needs to help the small businesses that are the true engine of our economy. Right now, freelancers, sole proprietors, unincorporated small businesses and pass-through entities are taxed at the high personal income tax rates. This treatment stifles small businesses. It also stifles tax reform because efforts to reduce loopholes and deductions available to the very rich and special interests end up hitting small businesses and job creators as well. The Trump plan addresses this challenge head on with a new business income tax rate within the personal income tax code that matches the 15% corporate tax rate to help these businesses, entrepreneurs and freelancers grow and prosper.
These lower rates will provide a tremendous stimulus for the economy – significant GDP growth, a huge number of new jobs and an increase in after-tax wages for workers.
It's a bit unclear here what his proposal is. It seems to me that he's saying that the low 15% tax rate will apply to not just corporations (which are taxed twice) but also to individual proprietors; in other words, EVEN if the business owner nets more than $100,000 (for a married couple) in personal income from the business --in which case ordinarily they would fall in the 20% bracket-- it will pay only 15% because its entrepreneurial income as opposed to labor income.

I can't say I agree with this. For genuinely small business owners I'm sort of okay with it. They often take significant risk in starting the business, so they should be able to reap a greater reward as a proportion of their gross income. But what if one owns a large, very wealthy enterprise that yields tens of millions in profit? Should he still pay a mere 15% tax rate, as opposed to the 25% that, say, a successful doctor/lawyer would pay for their $350,000 income? This makes no sense to me, nor to most Americans, especially those in the labor class who are treated adversely compared to the entrepreneurial class.

Regarding the essential premise that the corporate rate should not be greater than 15% lest it encourage inversions, I am fairly skeptical about this approach as well. As it stands now, even such "inverted" corporations, must legally pay the higher tax rate for the portion of its income generated in the U.S. So the inversion isn't all that straightforward. The reason it works is that accountants are attributing a greater share of the profits to the supposed host country that offers the lower rate. But if this tactic can be legally curtailed, then it won't work. Bottom line is that it's not true that we are helpless in our quest to get American business operators to pay the rate that WE deem appropriate based on OUR tax and budgetary considerations, as opposed to the lower rate offered by countries that have a lower per capita public expenditures than us.

This brings me back to the question of globalization. I don't believe we should relish the flattened world we live in. I believe it's totally fine to keep some trade barriers between countires, even at the expense of technological progress and cheaper consumer goods.

Saturday, February 06, 2016

Why I flipped from pro to con-TPP and similar international trade pacts

Traditionally, I have been pro-International trade for a long time now. During the TPP controversy last year, I was solidly in Obama's camp, supporting the trade deal. In recent months I have started questioning it more, after two lawmakers whom I highly admire have come out against it: Sen. Elizabeth Warren and Sen. Bernie Sanders. It took me a a few months to further ponder this question and I have now finally flipped: I am against trade deals unless perhaps if they are very narrowly focused and precisely implemented.

In explaining my reversal on this matter, first let me lay out out my traditional reasoning FOR International trade agreements.

International trade agreements, such as NAFTA, promise foreign countries that we will not impose tariffs on their manufactured exports to us, such as cars, toys, tools, furniture, electronic components, etc., in return for their agreement to purchase goods from us tariff-free, thus making us more competitive in their markets in fields that we are good at, such as weapons systems, medical technology and, recently, sophisticated software. (My understanding is that in the recent TPP deal, software and other copyright-protected American products are the main beneficiaries, as opposed to previous agreements which did not focus so much on such intangible goods for which foreign governments' cooperation with us in enforcing copyright is now so vital.)

In essence what we are saying here is: let us focus our energies on producing the types of goods that our smart, high-tech economy is really good at; let us then secure the cooperation of foreign governments to promise to pay a fair price to import such products and ensure that they are not pirated by their citizens. This will yield a nice profit for our high-tech sector. In return, we are willing to purchase from them cheap consumer goods such as apparel, inasmuch as such products cannot profitably be made here anyway due to higher wages and regulatory costs.

Obama has used the metaphor "the horse has already left the barn" to point out that the low-tech manufacturing that TPP calls for importing has already left our country anyway, and --willy nilly-- it ain't coming back. Why not then, argues Obama, should we not atleast fully profit from what we do make here by, in effect, threatening import tariffs (albeit this may be a bluff) if other countries do not pay a fair price for our exports?

To critics who argue "what about those workers who suffer the loss of jobs due to industries moving overseas?" Obama's solution is to offer government aid in retraining them for high-tech jobs that we are good at (and which constitute the backbone of our economy) and for the plethora of service jobs that support our core high-tech economy. This aid for retraining is known as TAA -- trade adjustment assistance.

Here's what changed my mind on this topic.

Charles Murray makes a very compelling assertion in "Real Education", one that has altered the way I think about education and the job market: About 70% of students are NOT CAPABLE of academic education. The standard educational track that American students are enrolled in --one that emphasizes reading and writing, advanced math, history, and natural sciences, and which leads to a college education and supposedly to a well-paid career and a good life-- is not suitable for most students. Most people do not have what it takes to succeed in such a track. They don't want it and they feel miserable being in it. He advocates teaching more traditional and simpler vocations such as plumbing and carpentry to such students.

As a teacher assigned to a "regular" 6th grade social studies class, I have become convinced from first-hand experience that his assertion is true. My students abhor reading and have no interest in what the Shang and Zhou dynasty did 3,000 years ago, nor in what ancient Hindus believed will lead them to moksha. I can honestly not envision that they will one day come to appreciate this stuff, as I did, and in any event this approach can only go so far. If students' ability and interest is severely limited then it's inappropriate to keep goading them in the fanciful hope and "high expectation" that they will eventually get it.

Upon some reflection on this I realized that Murray's doctrine is applicable in the job market as well: most people will never be a good fit for the kind of high-tech jobs that the Obama admin hopes America at large will specialize in. This could be formulated as a natural law: No matter how smart a given society is based on geography, genetics and historical circumstances, there will always be a majority within it which cannot rise to the level of productivity that the elite does. This explains what seemed an enigma to me for quite some time: how millions of Americans are actually quite content being cashiers, salespeople, security guards, phone operators and so on -- jobs that I view as numbingly and excruciatingly boring. I turns out that while they are boring to me, our society needs them; they cannot be exported, and there are always folks who not only are willing to take them, but will actually be content in them.

The corollary is that racing to the bottom --the idea of NOT making anything in this country that could be made cheaper and more efficiently in another-- may seem like a smart thing economically, but it is not an effective norm socially. Our society needs service jobs and manufacturing jobs that are simple and repetitive, not because the products and services can best be made here, but because they enrich and complement us as an integral, holistic society. A society without them is akin to a man without a woman or vice versa; one sector without the other is not a stable, functioning, and complete society. College for all, doctorate degrees for all, is not practicable.

Accordingly, there is a grave flaw in free trade. The assumption therein is that we can maximize high-tech employment by pushing everyone to get a "higher education" and keeping the service and low-paying manufacturing jobs (that could be outsourced more economically) to a minimum. If this is not achievable, as indeed it isn't, due to the inherent constraints in the basic aptitude of the majority of the population, then what we are in effect doing is creating a bubble in the service sector. Millions of Americans find work in the medical industry and as security guards and as cops and firefighters and special-ed teachers, not because they are really needed in those capacities, but because they can be hired cheaply by their employers and there is underlying social incentive to employ as much of the population as possible.

The end result is the exact opposite of what free-trade proponents are trying to accomplish. Instead of efficiency in the job market, entire service sectors are born and grow and thrive because its employees have nothing else to do in an economy that has been gutted of traditional jobs, such as construction and craftsmanship.

Moreover, because the service sectors balloon to such large proportions, the competition for its jobs is intense, which drives down wages, thus feeding the wide income gap between those employed in the core sectors of computer programming, medical technology and advanced weaponry, on the one hand--all of which are very profitably export sectors IN ADDITION to being consumed domestically-- and the service sectors which are by definition NOT exportable, on the other hand. Contrary to popular wisdom, jobs in the 21st century that are not exportable may indeed be fairly secure and command more than minimum wages, yet they are also by definition ("service") not part of our economic core. (After all, if all jobs were service jobs, we would have no surplus to spend on consumer imported goods.)

What we ought to do instead is nurture domestic craft industries that employ large numbers of people who do not have a college degree. Such workers will, of course, not make as much as the ones working in the cutting-edge high-tech sectors that are exportable and which are ultimately the engine of our economy. But such workers will get to do work that is satisfying psychologically, knowing that they are producing concrete stuff that is indispensable to their fellow citizenry, as opposed to boondoggling. In addition, unlike service jobs, manufacturing jobs are in theory exportable, even if in practice it won't happen often by dint of the higher cost associated with a higher standard of living, government regulation, labor rights, etc.

To summarize:

  1. Our service sector is one big bubble. Many of its jobs are unnecessary and unsatisfying.
  2. Service workers make very little money because there is a glut of job vacancies, many of which are boondoggles.
  3. The solution is to return to productive manual labor, not out of economic efficiency, but out of social necessity, and in order to close the income gap.
  4. Jobs that can be exported profitably should constitute the core of our economy and will only be occupied by intelligent and ambitious individuals --our "elite"-- around 20% of the population. Construction and craft work that COULD be exported but normally isn't should constitute the second tier. Service jobs that CANNOT be exported should constitute the lowest tier. Customer service call centers we can let go of completely (The Indians hold it in high regard and do it more efficiently).

Saturday, January 02, 2016

Democracy Gone Awry

In the last year or so I have come to the conclusion that the root of all the problems facing America today (growing inequality, profligate consumerism, materialism, greed, deception, a sclerotic state apparatus, and many more) is the very bedrock of our governmental system: democracy. To put it concisely, our democracy is based on old-school models of proper government. Such models do not work in the 21st century. The solution is to find a new model, especially adapted to our present epoch.

Most people take it for granted that democracy is obviously the right form of government. But this is not at all patently axiomatic. Most societies of the past, since neolithic times 10,000 years ago, both primitive pastoral ones and more advanced agricultural ones, were socially stratified ones. Some people (such as priests and governors) had clearly defined more power than others, and such societies often lasted for millennia, such as the Egyptian civilization.

By contrast, the few civilizations that did experiment with democracy, had a mixed record of success with it and none of them lasted for very long. The Romans, for examples, inexorably moved from republic toward empire through the various triumvirates, culminating in Julius Caesar's non-official abolition of the republic and declaring himself emperor. It is hard to envision any different historical path for a rapidly surging and prosperous 1st century B.C. Rome.

Greek democracy, almost from its very beginning was characterized by leaders' deception of the masses in order to secure their support for government policy.

Themistocles, the first non-aristocratic Greek politician in the newly-forged Athenian democracy of 508 B.C., sought to channel wealth generated by silver mines that had been recently discovered, into large naval fleet of triremes, in order to defend against what he feared would be an imminent Persian attack. As a populist leader he considered it tactless to cite the true reason for his plea to the masses to not splurge the newly acquired wealth. The people were terrified of the Persians and would have been shocked and dismayed to hear someone argue that Persians may return for an additional strike after having been stopped in the Battle of Marathon of 490 B.C.

Instead, Themistocles cited the the threat of Aegina as the reason for urging the massive naval buildup in 483 B.C. This is rather remarkable since the Persian threat was still quite vivid in the people's minds, and if it were to materialize, the outcome would be more detested than an occupation by a rival Greek city-state, since it would spell a complete annihilation of the Greek of way of life, by despised barbarians no less.

The modern equivalent to this is how the American government cited the threat of nuclear rearmament by Iraq as the reason for invading it and toppling its regime. Experts mostly agree that there wasn't any evidence for an Iraqi nuclear program and even if there were, there would have been other ways to deal with it (including doing nothing, as the administration did nothing about India and Pakistan and North Korea who similarly violated the global non-proliferation pact). The real reason for the Iraq war of 2003 was to appropriate (a.k.a. "steal"?)  Iraq's oil. As a bonus, it would be a boon for the defense industry, with which the Bush administration was in bed (Dick Cheney in particular).

Liberal would cry foul at any such declaration of war for the purpose of stealing the country's natural resources. Paradoxically, however, he might have gained the support of many ordinary Americans who do believe in the "might makes right" doctrine (which used to be taken for granted by all people). Still, in the Bush admin's reasoning, even if American may have retrospectively said decades from now "yeah, it's good that we got Iraq's oil; otherwise prices would have skyrocketed here and our lifestyle would have been crippled. After all, why does the oil belong to the Iraqis merely because it was found on their land?", such an argument couldn't have been made politically IN A DEMOCRATIC COUNTRY in 2003. The majority of American voters just wouldn't buy it, not to speak of the moral outrage the world would evince at this.

Thus, democratic governments are often forced to be deceptive to its electorate if its operating technocracy is to accomplish what is in the best interest of the people. A politician can either be an honest elitist, or deceptive populist, but honest populism doesn't do.

The solution.

The solution is to revoke the franchise from the hoi polloi. Voting for political office should not be an automatic right. Rather it should be a privilege for those who earn it by demonstrating proficiency in politics. Does it make sense for a plumber to get to tell me, a teacher, how to run a classroom, or someone who is not fluent in the social sciences to advise me as to what should and should not be included in the World History class that I teach? Everyone understands that in a highly specialized work force, such as is ours, the system runs best if disparate departments do not interfere in the operations of one another. When a contractor builds a house, the carpenter decides what kind of wood and nails to use and the type of drill, if any; the plumber decides what kind of piping to use and where to install it. The electrician has a slew of decisions to make in turn; and so on. Why then should politics be any different if the system has evolved, as it did, to be so complex as to require political professionals to give competent advice on how to run it?

To put this into practice, we should devise a written multiple choice test, drawn from a bank of thousands of questions. Those who want to participate in the democratic process, will take a 100-question-test, of which test items are drawn randomly from the bank, in a government testing center. If they get a passing score, they are then declared eligible to vote in elections. The test bank should encompass all subject matter that pertains to the contemporary political process, including constitutional law, major judicial rulings (e.g. Plessy V. Ferguson, Brown V. BOE, Marbury V. Madison, Citizen United, Miranda Rights), the branches and duties of our government, the function of government agencies (such as FCC, FAA, SEC, FTC, FDA, CIA, DOJ). You get the idea.

It is important to note that even though we have universal suffrage for all sane, law-abiding adults over 18, whose voting rights can easily be exercised in all elections, the fact of the matter is that an Athenian citizen in the 5th century B.C. assembling in the Acropolis and casting a stone to show their vote, was actually far more influential in government than ordinary citizens are today. For one, there were many fewer eligible Athenian citizens than there are Americans, so the weight of each voter was greater. Secondly, most citizens did not bother voting on any given referendum unless they actually cared about it (they would have probably been forced to take a unpaid day off work), thus further accentuating the relative weight of each vote. Thus, it is ironic that we tend to think that our representative democracy is more "democratic" since everyone gets to have input into who enacts the law; but in fact our system is less democratic insofar as our voices are frequently drowned out in a sea of votes, none of which specify what the elected official should actually do, only that the voters trusts that the official will faithfully represent their interest.

An even more sophisticated voting scheme could feature, additionally, the following:

1) Once a voter is certified as eligible to vote based on his politics proficiency test, the voter can then choose to specialize in one or more specialty fields, (e.g. foreign policy, consumer products, fiscal policy).

2) When a a policy question arises in a specialty field, those who have certification in the field can log in to an online portal where they can cast their vote within a certain time window. This moreover allows the two sides in a debate to make a persuasive verbal case for their respective positions, which the voting citizen "specialist" can then read and ponder prior to casting his vote upon online.

I am actually surprised that I have not come across any online voting proposal yet. It seems natural to me that, like so many other routine tasks that are performed online, voting should be done online as well. Even if we do not restrict access to "uncertified citizens" as my plan calls, one can envision many benefits enabled by an online voting platform.